Fannie Mae (FNMA)

[lookaheadfuture]

I think what will happen is to get the least possible risk to the taxpayer. This means recap at light speed. Anything that does not support recap will not be done.

So therefore, SPS will be cancelled. Warrants are also cancelled since if they are sold or exercised it will not support recap. Instead they will simply issue new commons (and not cancel current commons) and maybe a reverse split depending on how many they issue (depending on recap needs) and price.

I know that as per HERA they can exercise the warrants but the AIG decision could prove problematic. However, none of that matters because exercising the warrants provides no benefit to the GSE's and will not support recap.

They need to show a stability and independence from political interference going forward. There cannot be overhanging questions for years because as administrations evolve/change past decisions might be changed - as we are in fact witnessing right now in our favor (so far).

Trump wants to get the economy moving. This way he can do it.

And the Democrats will not be clamoring for him to exercise the warrants or even to sell the SPS. This is because there is an underlying threat that he could use those profits to pay for the wall. Better just to deny him any new source of funds.

As long as the GSE's continue with their affordable housing mission with less risk than before they will go along with it.

And Trump is not a pro government kind of guy. He must know that there is a chance he might not win next election. He won't risk those funds being handed to the democrats.

What I took from everything that Otting is reported to have said is that things will move fast in the very near future.

They will be back to business as normal just as fast as they were taken out, if not faster. The first sound we hear will be our jaw dropping to the floor.